10 July 2003 Edition
What decoupling means for Irish farmers
BY MATT TREASAIGH
We need to move decisively away from the traditional role of this country as the source of relatively cheap bulk produce and live exports that end up supplying the food markets and processing sectors in other states
At Luxembourg on 26 June, the Agricultural Ministers of the 15 EU member states agreed an amended version of the Common Agricultural Policy (CAP) reform proposals. Some of the original Commission proposals were rejected in full. Among them was degression, which would have seen a progressive reduction in the payments going to farmers so that they could be used for 'future market requirements'. Changes were also made to the proposal on modulation, which reduces the annual percentage decrease in the funds taken from farmers and diverted towards rural development measures. Member states will also now have greater control of the modulated funds than was originally proposed.
The most controversial aspect of the Fischler proposals had been to break the link between what a farmer receives in payments and what he or she produces. This is known as decoupling and had been strenuously opposed by the majority of the 15, including Ireland, and by most farming organisations. A number of compromises had emerged to allow for a partially decoupled system, but in the end the ministers agreed that each state be allowed choose from a number of options to partially decouple payments, or to opt for full decoupling.
Minister Walsh has now said that he will initiate a process of consultation with the farming organisations and other interested groups prior to making a decision on whether or not to opt for full decoupling. This is sure to lead to a wide-ranging debate within the sector and it is one in which Sinn Féin intends to participate fully.
Having analysed the original proposals, Sinn Féin presented detailed amendments on issues such as raising the income threshold under modulation and imposing an upper limit on the 2% who are the largest receivers of payments. The party will now submit its proposals on decoupling which, if fully implemented, could offer the possibility of putting at least a temporary stop to the steady erosion of both the numbers of farm households, and of farm incomes.
The reforms also present a window of opportunity for a more dynamic all-Ireland agricultural strategy. It is ironic indeed that one of the main criticisms thrown at the reform is that it threatens to 'renationalise' the CAP, ie give the member states more control over how they implement the proposals and utilise the available EU funding. Of course, republicans welcome any increase in national economic sovereignty, even if it is only on a small scale.
However, within that limited scope, Sinn Féin believes that full advantage ought to be taken of the opportunity to reshape Irish farming in a manner that will address the structural weaknesses of the sector. We are also convinced that this must be done on an all-Ireland basis, as any further barriers placed between farmers in the 6 and 26 Counties will only be to the detriment of both.
As part of our strategy to bring about an All-Ireland Agricultural Implementation Body, Sinn Féin spokespersons Martin Ferris and Gerry McHugh have called on the two governments to consult with all interested groups on both sides of the border and to implement whatever proposal is adjudged to be in the best interests of the majority of farmers. They have also urged the Six-County Department of Agriculture and Rural Development (DARD) to conduct a similar process to that in the 26 Counties in order to gauge the full range of views within the farming community in the Six Counties.
Of course, reform of the CAP cannot provide the solution to the problems facing Irish agriculture. Republicans will continue to argue that we need a far more radical vision that will not be constrained by the EU. That, however, must await the day when our party is in a far stronger position and when that strategy can be implemented on an all-Ireland basis. In the meantime, we recognise the reality of the situation and are prepared to work within current constraints to the best advantage of the majority of Irish farmers.
One of the reasons why Sinn Féin will be arguing in favour of full decoupling is that it provides the potential to free small and medium farmers from having to produce in order to receive subsidies but at the same time not being able to sell what they do produce to earn a viable living, even in the many cases where over half of household income comes from EU payments. Decoupling will guarantee a farmer a single annual payment but also allow he or she to produce and sell whatever they wish.
While this is reintroducing market forces in a way that has not been present within Irish agriculture for some decades, it does not have to mean the kind of unbridled free market that will ensure the further concentration of land and production, while tens of thousands of smaller farmers are forced out. That process has been taking place anyway and would have continued regardless of whether any changes had been made to Agenda 2000.
This can be amply demonstrated within dairying, where a recent report commissioned by the Dublin government recommended that the average milk quota be allowed to rise from the current level of 40,000 gallons to something approaching 100,000. That could only take place if thousands of smaller producers leave the sector. The report also recommended that dairy processing come to be dominated by one large operator, which would control 80% of the non-liquid milk market.
So it is slightly disingenuous of certain farm leaders to claim that dairy farmers are only under threat from CAP reforms. None of them said the same thing when the Prospectus Report was published some months ago, but then again the type of changes which it recommended would be to the advantage of the big dairy farmers, whom one sometimes suspects are the main concern of some.
The point is, that small to medium producers are under threat anyway. What we now say is that we ought to use the reforms and in particular the decoupling of payments from production, to begin a radical redirection of agricultural strategy.
We need to move decisively away from the traditional role of this country as the source of relatively cheap bulk produce and live exports that end up supplying the food markets and processing sectors in other states. That was the role assigned to Irish agriculture under the original CAP, just as it had been under British economic colonialism.
We need to encourage higher quality, higher value added production, which will not only provide farmers with a better return but will also help to promote an expanded processing sector to supply both the domestic and export markets. We will also need to address the problem of the concentration of power within the cartels that control the food processing sectors.
All of this will only form part of an overall strategy that will need to be fully worked out within the new context presented by the CAP reforms. For the moment, our focus remains on the manner in which decoupling will be implemented, and on ensuring that the party moves to the centre of that debate within the farming sector.
We need to move decisively away from the traditional role of this country as the source of relatively cheap bulk produce and live exports that end up supplying the food markets and processing sectors in other states
At Luxembourg on 26 June, the Agricultural Ministers of the 15 EU member states agreed an amended version of the Common Agricultural Policy (CAP) reform proposals. Some of the original Commission proposals were rejected in full. Among them was degression, which would have seen a progressive reduction in the payments going to farmers so that they could be used for 'future market requirements'. Changes were also made to the proposal on modulation, which reduces the annual percentage decrease in the funds taken from farmers and diverted towards rural development measures. Member states will also now have greater control of the modulated funds than was originally proposed.
The most controversial aspect of the Fischler proposals had been to break the link between what a farmer receives in payments and what he or she produces. This is known as decoupling and had been strenuously opposed by the majority of the 15, including Ireland, and by most farming organisations. A number of compromises had emerged to allow for a partially decoupled system, but in the end the ministers agreed that each state be allowed choose from a number of options to partially decouple payments, or to opt for full decoupling.
Minister Walsh has now said that he will initiate a process of consultation with the farming organisations and other interested groups prior to making a decision on whether or not to opt for full decoupling. This is sure to lead to a wide-ranging debate within the sector and it is one in which Sinn Féin intends to participate fully.
Having analysed the original proposals, Sinn Féin presented detailed amendments on issues such as raising the income threshold under modulation and imposing an upper limit on the 2% who are the largest receivers of payments. The party will now submit its proposals on decoupling which, if fully implemented, could offer the possibility of putting at least a temporary stop to the steady erosion of both the numbers of farm households, and of farm incomes.
The reforms also present a window of opportunity for a more dynamic all-Ireland agricultural strategy. It is ironic indeed that one of the main criticisms thrown at the reform is that it threatens to 'renationalise' the CAP, ie give the member states more control over how they implement the proposals and utilise the available EU funding. Of course, republicans welcome any increase in national economic sovereignty, even if it is only on a small scale.
However, within that limited scope, Sinn Féin believes that full advantage ought to be taken of the opportunity to reshape Irish farming in a manner that will address the structural weaknesses of the sector. We are also convinced that this must be done on an all-Ireland basis, as any further barriers placed between farmers in the 6 and 26 Counties will only be to the detriment of both.
As part of our strategy to bring about an All-Ireland Agricultural Implementation Body, Sinn Féin spokespersons Martin Ferris and Gerry McHugh have called on the two governments to consult with all interested groups on both sides of the border and to implement whatever proposal is adjudged to be in the best interests of the majority of farmers. They have also urged the Six-County Department of Agriculture and Rural Development (DARD) to conduct a similar process to that in the 26 Counties in order to gauge the full range of views within the farming community in the Six Counties.
Of course, reform of the CAP cannot provide the solution to the problems facing Irish agriculture. Republicans will continue to argue that we need a far more radical vision that will not be constrained by the EU. That, however, must await the day when our party is in a far stronger position and when that strategy can be implemented on an all-Ireland basis. In the meantime, we recognise the reality of the situation and are prepared to work within current constraints to the best advantage of the majority of Irish farmers.
One of the reasons why Sinn Féin will be arguing in favour of full decoupling is that it provides the potential to free small and medium farmers from having to produce in order to receive subsidies but at the same time not being able to sell what they do produce to earn a viable living, even in the many cases where over half of household income comes from EU payments. Decoupling will guarantee a farmer a single annual payment but also allow he or she to produce and sell whatever they wish.
While this is reintroducing market forces in a way that has not been present within Irish agriculture for some decades, it does not have to mean the kind of unbridled free market that will ensure the further concentration of land and production, while tens of thousands of smaller farmers are forced out. That process has been taking place anyway and would have continued regardless of whether any changes had been made to Agenda 2000.
This can be amply demonstrated within dairying, where a recent report commissioned by the Dublin government recommended that the average milk quota be allowed to rise from the current level of 40,000 gallons to something approaching 100,000. That could only take place if thousands of smaller producers leave the sector. The report also recommended that dairy processing come to be dominated by one large operator, which would control 80% of the non-liquid milk market.
So it is slightly disingenuous of certain farm leaders to claim that dairy farmers are only under threat from CAP reforms. None of them said the same thing when the Prospectus Report was published some months ago, but then again the type of changes which it recommended would be to the advantage of the big dairy farmers, whom one sometimes suspects are the main concern of some.
The point is, that small to medium producers are under threat anyway. What we now say is that we ought to use the reforms and in particular the decoupling of payments from production, to begin a radical redirection of agricultural strategy.
We need to move decisively away from the traditional role of this country as the source of relatively cheap bulk produce and live exports that end up supplying the food markets and processing sectors in other states. That was the role assigned to Irish agriculture under the original CAP, just as it had been under British economic colonialism.
We need to encourage higher quality, higher value added production, which will not only provide farmers with a better return but will also help to promote an expanded processing sector to supply both the domestic and export markets. We will also need to address the problem of the concentration of power within the cartels that control the food processing sectors.
All of this will only form part of an overall strategy that will need to be fully worked out within the new context presented by the CAP reforms. For the moment, our focus remains on the manner in which decoupling will be implemented, and on ensuring that the party moves to the centre of that debate within the farming sector.
